HCA incentives package sails through final council vote

Created 12/05/2012 - 12:01am

Economic incentives for Nashville-based Hospital Corporation of America breezed through the Metro Council Tuesday night with little discussion and even less opposition.

The deal is estimated to total $66 million over 20 years, making it one of the largest Metro has ever offered to a company. Three separate portions of the package, including tax abatements and cash grants, each passed Tuesday night by a vote of 34-1.

The package includes a 100 percent property tax abatement of up to $3 million per year for 15 years — with a five-year extension available if the company continues to occupy the space — a $1 million one-time payment to cover relocation costs, and an annual payment of $500 per employee. In addition, the state is providing a $2.1 million incentive grant.

Councilman Josh Stites was the lone council member to vote against the deal. He welcomed the council to “look at the math” and urged them, in vain, to vote against the deal because it’s “not fair for every business owner who works hard to beat out a living in the city.”

The math, Stites argued, shows how economic incentives are awarded to a very small group of companies and result in a relatively small amount of the city’s jobs. Out of 8,900 for-profit companies in the city — a number Stites sourced to the Secretary of State’s office — only 12 are currently taking advantage of active incentives deals, meaning less than one percent of Davidson County for-profit companies have access to taxpayer-funded economic incentives.

Addressing the argument that the companies awarded with such deals provide the most jobs, Stites conceded that they do indeed provide jobs, but noted that out of 537,000 jobs in the county, according to a Chamber of Commerce study two years ago, the total number retained or created as a result of such deals is 14,000.

With that in mind, Stites is planning to file legislation next year that he said would broaden the access to incentives, if they’re going to exist.

Metro Finance Director Rich Riebeling addressed the council at the request of Councilwoman Edith Langster, a sponsor of the incentives package.

"This project will create jobs,” Riebeling said, “will create more revenue for the city than we're currently getting and it will take an area of the city that is underdeveloped now and turn it into, I think really, one of the more important developed areas in the city."

Also speaking in support of the proposal, At-Large Councilman Ronnie Steine said that each incentives deal should be considered on its own merits, and that the HCA deal would result in more jobs, more revenue and development in an area that needs it. He also responded to a comment Stites made that the debate wasn’t about specific companies.

"I admire the philosophy and consistency of my cohort behind me but there is one thing I would differ with him,” Steine said of Stites. “I think it is very important who our partner is in this. And I think that as you look at the relationship of this company to this community and the measure of their dedication to this community since they were born in our town, is one of the reasons that this particular arrangement is particularly important and particularly attractive to our community."